As I noted in my 8 May 2008 post, expectations around a coming recessionary environment are driving current behavior among more and more Silicon Valley startups. Facebook is the latest company to join this behavior pattern, raising a sizable chunk of cash (in this case, $100 million via venture debt from TriplePoint Capital). Confirming the root source of the raise as an expectation (or if you prefer, a fear) of bearish times ahead, Facebook CFO Gideon Yu, quoted in Business Week, cites his own previous experience trying to raise money during a drought in 2000 as a driver in the decision.

Adding fuel to the fire is another recent report suggesting the acceleration of a “shakeout in the venture capital industry,” according to www.SiliconValley.com. Just as we are seeing with startups—where the “companies that can” are raising large rounds—there are a corresponding number of VCs with highly visible brands who are raising much larger funds than we’ve seen in years. I won’t name names, but look for several $500MM+ funds announcing in the near future. Many see this as the usual cycle, but I’m half inclined to bet we might have a self-inflicted meltdown on our hands if the startups raising such large amounts run into exit and/or down-round situations over the next 12-18 months.

Speaking of bets...this seems like a good time to talk about a company I have been engaged with for a little while now. Blubet is a startup delivering social gaming experiences to users, who can create bets on virtually anything. Blubet has several different games, the main types being “prediction” bets and “majority wins” bets. Prediction market theory (short version) says that given a broad enough audience, predictions made in these markets, e.g., “Who will win the U.S. Presidential election in November?” can be used to gauge the probability of said outcome happening in the real world (read long version here). To qualify, prediction questions have to have a demonstrable outcome in the future that can be used to decide the bet. For “majority wins” bets, all who vote on the winning side when the bet expires split the pot. Blubet has seen sizable growth recently and is backed by YouTube co-founder Jawed Karim’s Youniversity Ventures. Your account gets an instant credit of 30,000 BluBucks when you sign up, and you don’t put any real money on the line—just your credibility. In addition to the fun of betting on your opinions, simply browsing the lists of bets can be entertaining in its own right.

I just put up a bet about whether the current behavior of many high-profile startups is going to fulfill Marc Andreessen’s recent suggestion of an oncoming “nuclear winter” for startups and the broader economy. It’s currently posted as a prediction bet, but since I didn’t quantify it (by saying, for example that the NASDAQ will be down 30% by October 1), the Blubet team will probably re-categorize it as a “majority wins” bet. Go to www.blubet.com, join up, find my question by searching for “nuclear winter,” and place your bet!